What will Munroe do with $250 million from deal?

Published: Friday, April 26, 2013 at 6:30 a.m.

Last Modified: Thursday, April 25, 2013 at 6:18 p.m.

The Marion County Hospital District stands to reap about a quarter of a billion dollars when it completes a deal to lease Munroe Regional Medical Center to a private hospital company, probably sometime in the fall.

For the Hospital District Trustees, the question then becomes how to spend this eye-popping sum — which includes $212 million that Health Management Associates will pay for the lease, plus all the cash "receivables" on hand at the hospital when the deal is consummated. The total could be $250 million.

State law doesn't offer much guidance. In fact, the legislation that created the Hospital District in 1965 gives the trustees broad discretion to spend the money to construct, lease, operate or maintain any hospital or clinic it deems necessary for the people of Marion County. It also allows the trustees to establish medical training facilities, such as nursing schools, and to borrow money for hospitals and clinics.

Trustee Chairman Jon Kurtz said no decisions have been made about how to spend the money from HMA, but he expects to begin discussing various possibilities with local groups soon, and he expects those discussions to continue over the next six months or so.

"We have a big opportunity here," Kurtz said this week. "The worst thing we can do is to start doling out dollars without having a plan. I think we should be looking very long-term."

When the trustees meet on Monday, for example, he hopes to schedule a meeting with the Marion County Commission to hear their thoughts.

"The County Commission nominates the trustees (to serve on the board), so I think we need a broader base of people to decide how this money should be spent, other than the trustees," Kurtz said.

Kurtz said he'd like the money to be invested in some safe, interest-bearing account. The trustees would then spend the interest income from that account on community health care needs. At, say, 4 percent interest annually, the trustees would earn about $10 million a year from their $250 million investment.

Kurtz has asked Clerk of Court David Ellspermann, who handles the investments for Marion County government, to investigate how the trustees' money should be invested and to determine what restrictions there are for spending it.

Ellspermann said he didn't have all those answers yet but added that public money should always be invested safely. He said a good investment strategy would protect the principal first, then focus on longevity and, finally, on the yield.

The trustees will find no shortage of ideas for spending this windfall. A 2007 study conducted by the Public Policy Institute at the College of Central Florida revealed doctor shortages here and identified a number of significant health care problems, especially among the poor.

A recent study of local health care needs done by the Marion County Health Department confirmed many of those findings and added some new conclusions. Among those:

Marion County has a higher mortality rate for the 10 leading causes of death than the state as a whole.

Local residents have a far higher rate of respiratory disease than the state.

The infant death rate is "substantially" higher here than in the state as a whole.

Prenatal care is lower here than in Florida overall.

Marion County far exceeds the state's rate of suicide and domestic violence.

The number of licensed doctors per 100,000 population is half the state rate.

Jon Dean, a local attorney who serves as legal counsel for the trustees, said the trustees have "broad authority" to deal with a number of those issues by creating new health care services, partnering with existing health care providers to ramp up services or even offering educational health programs.

"But they don't have to spend the money to offer free health care," Dean said. "In fact, the statute requires them to exercise their fiduciary responsibility to charge reasonable fees."

<p>The Marion County Hospital District stands to reap about a quarter of a billion dollars when it completes a deal to lease Munroe Regional Medical Center to a private hospital company, probably sometime in the fall.</p><p>For the Hospital District Trustees, the question then becomes how to spend this eye-popping sum — which includes $212 million that Health Management Associates will pay for the lease, plus all the cash "receivables" on hand at the hospital when the deal is consummated. The total could be $250 million.</p><p>State law doesn't offer much guidance. In fact, the legislation that created the Hospital District in 1965 gives the trustees broad discretion to spend the money to construct, lease, operate or maintain any hospital or clinic it deems necessary for the people of Marion County. It also allows the trustees to establish medical training facilities, such as nursing schools, and to borrow money for hospitals and clinics.</p><p>Trustee Chairman Jon Kurtz said no decisions have been made about how to spend the money from HMA, but he expects to begin discussing various possibilities with local groups soon, and he expects those discussions to continue over the next six months or so.</p><p>"We have a big opportunity here," Kurtz said this week. "The worst thing we can do is to start doling out dollars without having a plan. I think we should be looking very long-term."</p><p>When the trustees meet on Monday, for example, he hopes to schedule a meeting with the Marion County Commission to hear their thoughts.</p><p>"The County Commission nominates the trustees (to serve on the board), so I think we need a broader base of people to decide how this money should be spent, other than the trustees," Kurtz said.</p><p>Kurtz said he'd like the money to be invested in some safe, interest-bearing account. The trustees would then spend the interest income from that account on community health care needs. At, say, 4 percent interest annually, the trustees would earn about $10 million a year from their $250 million investment.</p><p>Kurtz has asked Clerk of Court David Ellspermann, who handles the investments for Marion County government, to investigate how the trustees' money should be invested and to determine what restrictions there are for spending it.</p><p>Ellspermann said he didn't have all those answers yet but added that public money should always be invested safely. He said a good investment strategy would protect the principal first, then focus on longevity and, finally, on the yield.</p><p>The trustees will find no shortage of ideas for spending this windfall. A 2007 study conducted by the Public Policy Institute at the College of Central Florida revealed doctor shortages here and identified a number of significant health care problems, especially among the poor.</p><p>A recent study of local health care needs done by the Marion County Health Department confirmed many of those findings and added some new conclusions. Among those:</p><p>Marion County has a higher mortality rate for the 10 leading causes of death than the state as a whole.</p><p>Local residents have a far higher rate of respiratory disease than the state.</p><p>The infant death rate is "substantially" higher here than in the state as a whole.</p><p>Prenatal care is lower here than in Florida overall.</p><p>Marion County far exceeds the state's rate of suicide and domestic violence.</p><p>The number of licensed doctors per 100,000 population is half the state rate.</p><p>Jon Dean, a local attorney who serves as legal counsel for the trustees, said the trustees have "broad authority" to deal with a number of those issues by creating new health care services, partnering with existing health care providers to ramp up services or even offering educational health programs.</p><p>"But they don't have to spend the money to offer free health care," Dean said. "In fact, the statute requires them to exercise their fiduciary responsibility to charge reasonable fees."</p>